Death of a Super Walmart: a rumor

[mainebrokerman]

Originally Posted by K-Luv

Thanks for the clarification. I did not mean to allude to saying that Wal Mart sells everything at a loss. I was just saying that they can afford certain 'competitive' commodities to be lower than 'market value' such as gasoline and still make a profit as a whole.

with retail sales, its all about volume, on the cost side, wal-mart purchases, such huge quantities from other vendors/wholesalers/maufacturers, that they may get the cheapest cost, and beyond that ,,thier are manufacturer rebates/incentives/ad allowances, etc.

the other thing to consider, cost/expense analysis.
you compare a 4 thousand squ. ft local hardware store with an 80,000 sq ft wal-mart, the expense per sq. ft is ten times higher for the smaller hardware store,
however, the old standard of hardware stores (trying to make 50% margin)
has to adapt to increased competition,,,, in retail, its all about "turns" you can margin yourself right out of business.

[dramamama6685]

Originally Posted by mainebrokerman

with retail sales, its all about volume, on the cost side, wal-mart purchases, such huge quantities from other vendors/wholesalers/maufacturers, that they may get the cheapest cost, and beyond that ,,thier are manufacturer rebates/incentives/ad allowances, etc.

the other thing to consider, cost/expense analysis.
you compare a 4 thousand squ. ft local hardware store with an 80,000 sq ft wal-mart, the expense per sq. ft is ten times higher for the smaller hardware store,
however, the old standard of hardware stores (trying to make 50% margin)
has to adapt to increased competition,,,, in retail, its all about "turns" you can margin yourself right out of business.

Very well said. When I was a department manager for Wal-Mart, your # of turns per month were the stuff of bragging rights...for the record mine were over 3 a month!!